Glossary

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Oligopoly

A market structure in which a few, relatively large firms account for all or most of the production or sales of a good or service in a particular market, and where barriers to new firms entering the market are very high. Some oligopolies produce homogeneous products; others produce heterogeneous products.

Open Market Operations

The buying and selling of government bonds by the Federal Reserve to control bank reserves and the money supply; an important monetary policy tool. (See also Monetary policy.)

Operating Costs

The expenses of doing business.

Opportunity Cost

The next-best alternative a person gives up in making a
choice.

Overdraft

A check written for more than the balance in one’s checking account; in colloquial terms, a check that bounces. The bank will mark such a check NSF, for
“non-sufficient funds,” and will charge a penalty fee for the nuisance involved in handling a bounced check.